The Federal Reserve Bank of Kansas City has released its report on farmland prices from the first quarter of 2011. The Tenth Federal Reserve District includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, the northern half of New Mexico, and the western third of Missouri.

Here are a few key points from the report:

Oklahoma bankers were concerned that a severe drought could slash yields, lower farm income and lead to a deterioration in loan repayment rates.

Booming energy exploration lifted land lease revenues and farmland values, specially in the mountain states and Oklahoma.

Compared to last year, District cash rental rates for irrigated cropland rose an average of 17 percent, close to the 20 percent annual gain in land values. Rental rates varied widely across the region, according to moisture and soil conditions.

Most bankers felt that farm income would hold at elevated levels, although a small number felt that rising input costs or poor crop and grazing conditions would limit incomes during the next three months.